Firms which lost mines should have refusal right in auction: PC Parakh

New Delhi: The government should give the first right of refusal in the ensuing coal mine auction to the companies which lost the blocks in the mass cancellation by the Supreme Court, former Coal Secretary PC Parakh said.

The economy will be severely impacted if the government fails to re-allocate the cancelled blocks within six months, Parakh said while reacting to the court verdict quashing allocation of 214 out of 218 coal blocks allocated to various companies since 1993 in a major blow to the corporate sector.

He also questioned as to why no investigation was carried out against those who prevented implementation of a transparent allocation system.

"The Supreme Court has cancelled all the blocks except four. I believe that the blocks cancelled will be re-allocated and if present holders are given the first right of refusal then there would not be much dislocation of work. If there is a wholesale change and new people come, it would have a very severe impact," the former Coal Secretary said.

It may be noted that Parakh's name figured in an FIR filed by the CBI in the coal scam. The agency filed a closure report last month.

The severity of the impact could be mitigated if the company holding mines prior to today's cancellation are given the option to match the price of the highest bidder in the auction and the mine should be alloted to the highest bidder only after his refusal, he said.

The impact on the power sector and economy depends on how fast re-allotment is done, he said. "If it is not done within 6 months then the impact would be very severe," he cautioned.

He also wondered why there was no "investigation into reasons as to why it took about eight or ten years to implement a decision which was taken in 2004," and said "this issue has not been investigated by CBI here at all and Supreme Court has not directed CBI to look into this aspect."

He asked why "no investigation has taken place" against those who failed to implement a transparent policy. "That is one big lacuna in the way investigation is going. People who made the mistake of following wrong policy and making wrongallocation, no action was taken against them."